What are the pros and cons of investing in a global equity fund?

Is it safer to invest in an interest income fund? Which is more likely to provide higher returns? Which is better for short term gains?

These two are my only choices.

Income trusts are great, just remember the taxes you have to pay on the dividends unless you have it set up in your rrsp. For the short term I would suggest possibly a basket of small cap oil & gas stocks. Also penny minning stocks, they are my favorite if you day trade these like copper, uranium, nickle, gold, silver, paladium, zinc to name a few. Canada is going to be the superpower for oil and gas, minning, and lumber. The world knows this and thats why the chinese and indian markets are are buying up shares of canadain companies. The economic growth with those two are massive. I say get a basket of small to medium term oil & gas stocks. Also look for consumer income trust that pay nice dividend like LIQ-UN.TO. I have only been investing for 2 years and have already made enough to go out and buy a house with mabye having a 5year mortage.

Hi, i recommand you a good and basic tutorial for investing. it covers all Issues related to your Investing and everything around it.

http://www.investingtutorial.info/

wish it will help you.

Good Luck , Best Wishes!

A global equity fund invests in global stock markets. These funds invest a part of their investments in North America, Europe, and Asia. Some of them own innumerable securities to enjoy the growth prospects of various companies while spreading around the risk that comes with investing in different companies. A good global equity fund forms the base of a well-diversified mutual fund portfolio for any profile of investor.
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Hi Swatgirl,

The pros of investing of in a global equity mutual fund are equity diversification around the globe and not having to worry about making the decision about which markets to invest in. The portfolio manager will make this decision for you. Diversification may also help to reduce volatility.

The cons/risks of investing in a global equity are similar to the cons/risk of investing in an international equity fund but to a lesser extent. The risks would include political risk, currency risk, as well as emerging markets risk. Emerging or any developing market can be much more volatile than a mature market. And specifically for a global equity fund, the advantage of the portfolio manager picking the countries could also be a con/risk. You may disagree with the manager's country selections, but would have no control over the allocation.

As far as the decision to invest in an income fund over perhaps a global equity fund, the risk and return characteristics may be very different. Income funds are usually less risky than equity funds, but also normally have lower returns.

I am not sure that I understand the short-term gains question. Income funds primarily generate income while equity funds primarily produce gains or losses. Over long periods of time, you are more likely to generate higher returns with an equity fund compared to an income fund, but the risk is likely to be higher.

I hope this helps.

Michael A. Weiss, CFA
The Editor
The Mutual Fund Investor
http://www.mutualfundinvestor.net